More people are buying food at Dollar General

Trend helps boost the company's sales

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It’s no secret that the retail industry is in turmoil. Dozens of chains have filed for bankruptcy protection this year, and many others are closing hundreds of stores.

But Dollar General, the Tennessee-based discount chain, is bucking the trend. The company says sales rose 11 percent in the most recent quarter, as it beefed up its selection of frozen foods and added produce to some of its locations.

It is opening about 900 new stores next year, and remodeling 1,000 more.

The chain has several stores in the Corridor.

The goal is to become as convenient as it is affordable. The company is focusing not just on rural areas, where many of its customers already stop by for necessities, but also in larger metropolitan areas where it is hoping to attract a new group of more affluent customers.

By the end of this year, executives say 75 percent of Americans will live within five miles of a Dollar General.

“We continue to believe we operate in one of the most attractive sectors in retail,” CEO Todd Vasos said in a Thursday morning call with analysts. “Our customer loves the in-store treasure hunt for unique items.”

Over the past five years, the company has expanded its snack and beverage aisles, and nearly doubled the amount of freezer space in its stores to accommodate more frozen pizzas, ice cream and other grab-and-go items.

A handful of remodeled stores also offer fresh food.

In addition, Dollar General has added more branded products such as Tide detergent, while expanding its own line of private-label items. It’s also considering revamping its health and beauty departments, in hopes of win over shoppers who might otherwise buy items like shampoo and makeup at drugstores.

“The company is capturing a more significant share of spending from middle income and more affluent Americans,” Neil Saunders, managing director of GlobalData Retail, wrote in a note to clients. “Dollar General has redesigned the cosmetics area in many stores to showcase on-trend products better. Early indications suggest that these changes are working well and are driving up market share.”

Dollar General, which was founded in 1968, has more than 21 billion in annual revenue.

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